Gene's Toyota Sales & Service

National Labor Relations Board - Board Decisions

Sep 29, 1980

252 N.L.R.B. 478 (N.L.R.B. 1980)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Gene's Toyota Sales and Service and Walter
Reagan. Case 7-CA-16655
September 29, 1980
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND PENEI.LO
On June 19, 1980, Administrative Law Judge
Marvin Roth issued the attached Decision in this
proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,'
and conclusions of the Administrative Law Judge
and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondent, Gene's Toyota
Sales and Service, Inc., Muskegon, Michigan, its
officers, agents, successors, and assigns, shall take
the action set forth in the said recommended
Order, except that the attached notice is substituted
for that of the Administrative Law Judge.
I Respondent has excepted to certain credibility findings made by the
Administrative Law Judge It is the Board's established policy not to
overrule an administrative law judge's resolutions with respect to credi-
bility unless the clear preponderance of all of the relevant evidence con-
vinces us that the resolutions are incorrect Slandard Dry Wall Producix.
Inc.. 91 NLRB 544 (1950), enfd 18X F2d 362 (3d Cir. 1951). We have
carefully examined the record and find no basis for reversing his findings
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
WE WIL.L NOT discourage membership in
Local 527, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and
252 NLRB No. 71
Helpers of America, or any other labor organi-
zation, by discriminatorily terminating employ-
ees, or in any other manner discriminating
against them with regard to their hire or
tenure of employment or any term or condi-
tion of employment.
WE WILtI NOT threaten employees with un-
favorable employment references in retaliation
for their union activities.
WE wit.l. NOT discriminatorily prohibit or
restrict employees from using our telephones
for personal calls, in reprisal for their union
activities.
WlI WILL NOT promise or grant wage in-
creases to our employees in exchange for their
withdrawal of support for Local 527, Interna-
tional Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, or
any other labor organization.
WI: WIll. NOT in any like or related manner
interfere with your right to engage in union or
concerted activities, or to refrain therefrom.
WI witLL offer Walter Reagan immediate
and full reinstatement to his former job or, if
such job no longer exists, to a substantially
equivalent position, without prejudice to his
seniority or other rights and privileges, and
make him whole for losses he suffered by
reason of the discrimination against him, with
interest.
All our employees are free to become or remain,
or refuse to become or remain, members of Team-
sters Local 527, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers
of America, or any other labor organization.
GENE'S TOYOTA SAI.ES & SERVICE,
INC.
DECISION
STA.MTIMENT 01r THE CASE
MARVIN ROTH, Administrative Law Judge: This case
was heard at Muskegon, Michigan, on February 14 and
15, 1980. The charge was filed on July 31, 1979, by
Walter Reagan, an individual. The complaint, which
issued on September 14, 1979, alleges that Gene's Toyota
Sales & Service, Inc. (herein the Company or Respond-
ent), violated Section 8(a)(1) and (3) of the National
Labor Relations Act, as amended. The gravamen of the
complaint is that the Company allegedly laid off Reagan
because of his union activities, and further violated Sec-
tion 8 (a)(1) by threatening employees with unfavorable
employment references, prohibiting employees from
using the Company's telephone for personal calls, and
failing to clean the employees' work area for 2 days, all
in reprisal for their union activities, and by promising
478
GENE'S TOYOTA SALES AND SERVICES, INC.
and granting wage increases to employees in exchange
for their withdrawal of support for Local 527, Interna-
tional Brotherhood of Teamsters, Chauffeurs, Warehou-
semen and Helpers of America (herein the Union). The
Company's answer denies the commission of the alleged
unfair labor practices. However, in its post-hearing brief,
the Company admitted in sum that it promised and
granted wage increases to employees in exchange for
their withdrawal of support for the Union, that Service
Manager James Westover dumped garbage on the floor
of a work area in reprisal for the employees' union activ-
ity, and that the layoff of Walter Reagan was motivated
in part (albeit not dominant part) by Reagan's union ac-
tivity. All parties were afforded full opportunity to par-
ticipate, to present relevant evidence, to examine and
cross-examine witnesses, to argue orally, and to file
briefs. The General Counsel and Respondent each filed a
brief.
Upon the entire record in this case and from my obser-
vation of the demeanor of the witnesses, and having con-
sidered the arguments of counsel and the briefs submitted
by the General Counsel and Respondent, I make the fol-
lowing:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
The complaint alleges and the answer admits that the
Company is and has been at all times material a Michi-
gan corporation with its only office and place of business
at 2221 S. Henry in Muskegon, Michigan, and is and has
been at all times material engaged in the sale and service
of Toyota automobiles to the general public. The com-
plaint further alleges, and the answer admits, that during
the calendar year 1978, "which period is representative
of its operations during all times material herein," the
Company had gross revenues in excess of $500,000, and
received at its Muskegon place of business, automobiles,
repair parts, and other goods and materials valued in
excess of $50,000 which were shipped directly from
points outside of Michigan. These admitted facts are suf-
ficient to warrant assertion of the Board's jurisdiction in
this case. However, some elaboration is warranted in
connection with the alleged unfair labor practices.
Therefore the Company's operations will be further dis-
cussed in connection with the merits of the case. At this
point I find, as the Company admits, that it is an employ-
er engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
It. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning
of Section 2(5) of the Act.
111. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background. The Nature of the Company's
Operations, and the Union Organizational Campaign
Since May 25, 1978, the brothers Daniel and David
Marchido have been and still are the sole owners of the
Company, having purchased the business from their
father, Eugene Marchido. Daniel is president and David
is vice president of the Company. Until January 21, 1980,
the Company was a franchised Toyota dealer, and in
that capacity was engaged in the sale and servicing of
Toyota automobiles to the general public. The Company
was and still is also engaged in the sale of used cars to
the public, and this has always been the Company's most
profitable operation. On August 2, 1979, the Company
entered into a written agreement to sell to E & B Auto
Sales, Inc., all of its stock of Toyota vehicles and equip-
ment, subject to E & B being designated as the area
Toyota dealer. The franchise transfer was approved on
January 21, 1980. In the meantime, the Company contin-
ued to sell and service Toyota vehicles until the first
week of December 1979, when (notwithstanding that the
franchise transfer had not yet been formally approved),
E & B took over the Toyota operation at its own prem-
ises. Thereafter, the only mechanical work performed by
the Company consisted of such work as was necessary to
put the used cars in saleable condition; i.e., the Company
no longer engaged in service work to the general public.
In January and February 19791 the Company's top
echelon consisted of Daniel and David Marchido and
their general manager, Paul Garonson. James Westover
managed the service department. The service department
personnel complement consisted of mechanics Walter
Reagan, Frank Smith, and Earl Andre, Parts Manager
Richard Sly, cashier-clerk Carol De Rochey, and two
part-time cleanup boys. In January, Reagan talked to his
fellow mechanics about a union. 2 They agreed to join
the Teamsters Union. They each signed union authoriza-
tion cards which Reagan had obtained from the Union,
and Reagan returned the signed cards to the union hall.
On February 2, the Union sent a letter to the Company
in which it requested recognition as the collective-bar-
gaining representative of the mechanics. No answer
having been received, the Union on February 8 filed a
petition for a Board-conducted election (Case 7-RC-
15254). On February 13 the Company received notifica-
tion of the election petition.
B. The Company's Response to the Union Activity
The Alleged Violations of Section 8(a)() of the Act
On February 3, Service Department Manager James
Westover received the Union's request for recognition.
Westover promptly telephoned the Marchido brothers,
who were then in Florida. All three were "angry" and
"upset." Westover "hated" the Teamsters, and Dan Mar-
chido was convinced that he could not afford to operate
with a union. They were particularly upset and angry at
Reagan, who Westover assumed was responsible for the
union activity. (Reagan had already informed Westover
that the three mechanics had joined the Union and the
place was unionized now.) On Monday, February 5,
Westover made clear to the employees, in no uncertain
I All dates herein are in 1979 unless otherwise indicated
2 Reagan's reasons for engaging in this activity are immaterial to the
question of whether or not he was lawfully terminated. Ohio [alley
Graphic Arls. Inc., 234 NLRB 493 (1978) Al the hearing company coun-
sel offered to prove that Reagan joined the Union in order to have job
security" In any event, that would be a legitimate reason for engaging in
such actiit, Ohio Valley. supra at fn 4
479
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
terms, the Company's hostility toward unionization. Wes-
tover told Reagan that Dave Marchido would like to
poke him.
Service Manager Westover, who was presented as an
adverse witness for the General Counsel, testified that he
gave vent to his feelings by dumping trash on the floor
of the employees' work area, but that he picked up the
trash about 5 or 10 minutes later. The Company normal-
ly had a policy of keeping its garage floor in "immacu-
late" condition, and the cleanup boys normally cleaned
the floor every night. Reagan and Earl Andre, who was
also presented as a witness for the General Counsel, testi-
fied in sum that the floors were not cleaned for 3 con-
secutive days during the week of February 5. Reagan
testified that an oil spill remained for 3 days, creating a
hazardous condition, and that he complained to General
Manager Garonson. Andre testified that the floor was
washed on one day, but that the cleanup boy left soap on
the floor, leaving the floor in a slippery condition. Carol
De Rochey, who was also presented as a witness for the
General Counsel, testified that in February she over-
heard Garonson tell one of the cleanup boys that the
boys were not to clean the floor. Garonson was not pre-
sented as a witness in this proceeding. However Chet
Kroll, who was one of the cleanup boys, was presented
as a Company witness. Kroll testified that he cleaned the
garage floor every day during the week that Dan and
Dave Marchido were away, and that no one told him
not to clean the floors. Kroll further testified that he saw
some clean oil on the floor, and he asked Frank Smith
how it got there. According to Kroll, Smith indicated
that he did it intentionally, and by way of demonstration,
poured more oil on the floor. Kroll testified that he
cleaned up the oil. Smith, who was presented as a com-
pany witness, did not testify about the matter. I am not
persuaded that either De Rochey or Kroll were demon-
strably lacking in credibility as witnesses. There may
well be truth in the testimony of all of the witnesses con-
cerning this matter. In light of the ncident described by
Kroll, it is possible that Smith was venting his personal
anger by spilling oil on the floor, and that Garonson, in
counter anger, told the other cleanup boy not to clean
the floors. Given this incident, and the fact that the
floors were probably wet and dirty for much of the time,
due to the snow conditions which normally prevail in
Muskegon at that time of year, I find that the General
Counsel has failed to prove by a preponderance of the
credible evidence that the company intentionally failed
to clean its garage floor in retaliation for the employees'
union activity. I further find that Westover's childish
action in throwing trash on the floor, although evidenc-
ing the Company's hostility toward unionization, was too
isolated and brief to have affected the employees' work-
ing conditions, e.g., by creating unhealthy or hazardous
working conditions. Therefore I am recommending that
this allegation of the complaint be dismissed.
Walter Reagan testified that prior to February, compa-
ny policy was that the Company preferred that its
phones not be used by employees for personal calls, but
that the phones could be so used when necessary, prefer-
ably during breaks or at lunchtime. According to
Reagan, Dan Marchido and Westover told the employ-
ees to avoid using the phones continuously during the
day. Earl Andre testified that the Company permitted
the employees to use its telephones at any time of day.
The Company did not present any testimony or other
evidence concerning its policy. It is evident from the tes-
timony of Reagan and Andre that the Company was le-
nient in permitting its employees to use company tele-
phones for personal calls, short of abuse of that privilege.
Andre testified that after the Company learned of the
union, Jim Westover announced that "no union people
could see the telephone" during working hours. Walter
Reagan testified that on one occasion in late February he
tried to telephone his wife between 5:30 and 6 p.m.; i.e.,
after business hours. Someone pushed the buttons on the
office telephone to prevent them from talking. Carol De
Rochey testified that Garonson did this. Reagan testified
that when he complained to Garonson and Westover,
they told him that he was not to use the telephone again,
and that no one was permitted to call him at the Compa-
ny's place of business. The Company did not present any
testimony or other evidence concerning these matters. In
light of Westover's reference to the "union people," Gar-
onson's obvious harrassment of Reagan, the timing and
arbitrary and selective nature of these actions, and the
absence of evidence that the Company had any legiti-
mate reason for curtailing use of its telephone by the
union members, 1 find that the Company curtailed the
use of its telephones by the mechanics, and particularly
by Reagan, in reprisal for their union activity. The Com-
pany thereby violated Section 8(a)(l) of the Act.
Stoughton Trailers, Inc., 234 NLRB 1203, 1206 (1978).
During the second week of February, after the Mar-
chidos returned from Florida, they summoned Reagan,
Smith, and Andre into their office. Dan Marchido said
that they sold the dealership to the Duthler Car Agency,
and that there would be no union in the shop. (In fact,
on February 17 the Company entered into an agreement
to sell its Toyota operation to Duthler, but the sale was
never consummated because Toyota refused to approve
this transfer of its franchise.) According to Reagan, Dan
Marchido said that they "had talked to different dealers
in the Muskegon area and they would blackball us and
we would never get a job in Muskegon." Reagan's testi-
mony concerning this conversation was uncontradicted.
Earl Andre testified, also without contradiction, that in a
subsequent conversation Dave Marchido told him that he
(Andre) had blown his chances of getting a job any-
where else, and that "no one wants to hire an instigator
or troublemaker." I credit the testimony of Reagan and
Andre, and I find that the Company, through Dan and
Dave Marchido, threatened its employees with unfavor-
able employment references in retaliation for their activi-
ties on behalf of the Union. Cf., Young Hinkle Corpora-
tion, 244 NLRB 264 (1979). If, as here, an employer indi-
cates that it has or is willing to prevent its employees
from being hired elsewhere because of their union activi-
ty, then an inference is warranted that the employer
would also be inclined to remove the employees from its
own employ because of that union activity. Therefore,
the threats by Dan and Dave Marchido may properly be
480
GENE'S TOYOTA SALES AND SERVICES, INC.
considered as evidence of the Company's motivation in
subsequently terminating Walter Reagan.
As indicated, on February 13 the Company received
notice of the Union's election petition. Later that week
the Marchidos once again summoned the three mechan-
ics to their office to discuss the matter of unionization.
Reagan, Andre, and Frank Smith (who was presented as
a company witness) testified concerning the interview.
The Marchidos stated their position bluntly and to the
point. They asked what it would take for the employees
to withdraw from the Union. They asked if the employ-
ees wanted raises. The employees said they did. The
Marchidos asked how much they wanted. Reagan and
Smith said they each wanted raises of $1.50 per hour
(from $7.50 to $9 per hour for Reagan and from $5 to
$6.50 per hour for Smith). Andre wanted an increase of
at least $1.25 per hour from his current rate of $3.25 per
hour. The Marchidos did not argue about the amounts.
Dan Marchido told the employees that they would get
the raises if they withdrew from the Union, after they ef-
fectuated that withdrawal. After the interview, the three
mechanics talked among themselves and agreed to with-
draw from the Union. That weekend they went to the
union hall and requested that the Union withdraw the
election petition. On February 22, the Company received
notification that the petition was withdrawn. Reagan and
Smith each received raises of $1.50 per hour, effective as
of the payroll week ending Friday, March 9. Andre
never received his increase, because the Company laid
him off during the last week of February. Reagan's suc-
cess was short-lived, because he was terminated on
March 6. Dan Marchido testified that he told the em-
ployees that "if you fellows want a wage increase, we're
going to have to go through arbitration with the union
and it could take some time or if you want it right away,
you can drop the union and we'll do it." Marchido's own
version of the interview constitutes not only an admis-
sion that he unlawfully promised immediate wage in-
creases in order to induce the employees to withdraw
from the Union, but also that he further violated the Act
by threatening to deal in bad faith with the Union, by
delaying or refusing to grant wage increases which he
would have promptly granted if they were not represent-
ed by the Union. "An employer's legal duty in deciding
whether to grant benefits while a representation petition
is pending is to determine that question precisely as if a
union were not in the picture." Newport Division of
Wintex Knitting Mills, Inc., 216 NLRB 1058 (1975). 1
credit the testimony of the employees, and I find that the
Company violated Section 8(a)(1) of the Act by promis-
ing and subsequently granting wage increases to its em-
ployees in exchange for their withdrawal of support for
the Union. N.L.R.B. v. Exchange Parts Co., 375 U.S. 405
(1964). I further find that the Company's action tends to
indicate that while it wished to keep down labor costs,
the Company's primary concern was to maintain a non-
union shop. Thus the Company hesitatingly agreed to
substantial pay increases, which it supposedly could ill
afford, in order to get rid of the Union. Dan Marchido
was, as he indicated in his testimony, convinced from
talking with other employers that he could not afford to
operate with a union. Whether he was concerned with
continuing the dealership himself or with maintaining a
marketable franchise, it is evident that the Marchidos re-
garded nonunion conditions as indispensible. 3 By promis-
ing and subsequently granting wage increases in ex-
change for withdrawal of union support, the Company
succeeded in removing the immediate prospect of union-
ization. The next step, as will be discussed, was to secure
that result by getting rid of the principal, and indeed
only remaining, advocate of unionization.
C. The Termination of Walter Reagan
On Monday, March 5, Service Manager Westover in-
dicated to Walter Reagan that Reagan would be laid off.
The next morning Reagan was summoned to the Marchi-
dos' office. They gave him a termination slip which indi-
cated, without explanation, that he was laid off, and also
indicated without explanation that he was not reem-
ployable. Reagan testified without contradiction that
Dave Marchido threatened: "We're going to fix you,
we're going to sue you. The old man is going to sue you
too." Dan Marchido then told his brother to calm down,
and told Reagan that he was let go "because of just lack
of work." The Company did not give Reagan any other
reason for his termination. The testimony presented by
Dan and Dave Marchido and by Jim Westover concern-
ing the reason or reasons for Reagan's termination was
shifting and contradictory. Westover testified that
Reagan was laid off "strictly for lack of work." Accord-
ing to Westover, Dan Marchido asked him for his rec-
ommendation about a layoff. Westover testified that he
recommended a layoff because work was slow, that he
recommended that Andre be selected for layoff, because
of problems with his work, and that Reagan be laid off
because he was paid more than Frank Smith, the remain-
ing mechanic. Dan Marchido initially testified that
Reagan was laid off for "strictly an economic reason."
Dan Marchido explained that he wanted to make the
service department profitable in order to make the fran-
chise saleable, and that Reagan was let go because he
cost more money than Frank Smith. Dave Marchido tes-
tified that they decided to lay off Reagan because he was
earning $9 per hour, although Smith could do as good a
job at $6.50 per hour, and because Reagan was "bad-
mouthing" the business to customers. As an adverse re-
buttal witness for the General Counsel, Dan Marchido
attempted to bring his version in line with that of his
brother. Dan Marchido testified that the "bad mouthing"
was a "very important" factor which "triggered" the de-
cision to "discharge" Reagan (although Reagan was told
that he was laid off for lack of work). However, in his
investigatory affidavit to the Board, Dan Marchido
stated that the badmouthing had nothing to do with the
decision to lay off Reagan. The most illuminating testi-
mony in this morass of shifting and conflicting assertions
was given by Dan Marchido in response to a question as
3 For the purpose of deciding the issues in this case, it is immaterial
whether the Company's decision to sell the Toyota Franchise was made
before or after it learned of the union activity. The General Counsel does
not contend that the sale was unlavful. As indicated. the Company was
determined to keep the Union out, regardless of whether or when it sold
the franchise.
481
DECISIONS OF NATIONAL LABO()R RELATIONS BOARD
to why the Company failed to recall Marchido when
work became available. Dan Marchido answered as fol-
lows:
A. We already heard that Walt had got a job
down in Grand Haven and after he had started this
union thing, to be quite honest with everybody, I didn't
really care fbr Walt Reagan anymore to even have him
round the place. He was creating problems like that
and the day we laid him off, there was what hap-
pened that morning was it was reported to us that
he was saying derogatory [sic] remarks about our
business to a customer in the service garage.
Q. Was there any-
A. I thought after giving him that raise and for
him to do that to us, was just too much. [Emphasis
supplied.]
The above quotation indicates that because of "this union
thing" Marchido had already decided before March 6
that he no longer wanted Reagan around the place.
Assuming, arguendo, that I were to credit the Marchi-
dos' assertion that Reagan was laid off because he was
being paid too much money, I would nevertheless be
compelled to find that his termination was unlawful. If
Reagan was being paid too much money, then that con-
dition was brought about by the Company's own unlaw-
ful conduct in granting him a substantial wage increase
in exchange for his withdrawal of support for the Union.
Therefore Reagan's termination would be a direct result
of the Company's own unfair labor practices, and would
in itself be unlawful. However, it is evident that Reagan's
wage rate was not the reason for his termination. As
Dan Marchido acknowledged, the Company's service de-
partment, like that of franchise auto dealers generally,
was not a profitmaking operation. The Company's profit
was derived primarily from the sale of used cars, and
secondarily from the sale of new Toyota vehicles. The
service department was a necessary adjunct of its Toyota
franchise. The manufacturer compensated the dealer for
service performed under warranty at a labor rate which
was below that normally charged to the public. It is evi-
dent that under these conditions the Company's best in-
terests would be served by fast and competent service,
with a minimum of "comebacks," which would have the
dual effect of keeping the service departments' financial
loss to a minimum, and of attracting prospective purchas-
ers of new cars. Until March 1979, Dan and Dave Mar-
chido were successful in reducing the service department
loss to a tolerable level. Dan Marchido testified that in
prior years, when their father operated the business, the
service department sustained losses of $20,000 to $30,000
annually. However, in 1978 the service department sus-
tained a net loss of only $1,209. In January and February
1979, when business was slow, the service department
actually operated at a profit ($1,683 in January and $389
in February). All this was accomplished by a department
staff which always included three mechanics. In late
February the Company laid off Earl Andre, Parts Man-
ager Richard Sly, and cashier-clerk Carol De Rochey.
However De Rochey was recalled within 2 to 3 weeks
and continued to work for the Company until late July.
(In June she received a pay increase of 50 cents per
hour.) The General Counsel does not allege that these
layoffs were unlawful. It may well be that these layoffs
would have occurred without the union campaign. How-
ever, it is evident that until Reagan's union activity, the
Company had no intention of losing its best and most ex-
perienced mechanic. Reagan had worked for the Compa-
ny as a mechanic since 1969, had 32 years experience as
a mechanic, and was the Company's only "A" mechanic,
i.e., qualified to perform the most difficult jobs. Reagan
and Andre testified without contradiction that in early
January, when work was slow, Jim Westover assured
Reagan that if there was a layoff, Reagan would be the
last mechanic to be let go. Westover said that the order
of layoff would be Andre, Smith, and Reagan, and that
in fact Reagan would not be laid off because the Compa-
ny would close down the business before letting him go.
At this time, as in March 1979, Reagan was earning
$2.50 per hour more than Smith. Therefore it is evident
the Company preferred to retain Reagan rather than
Smith, notwithstanding that Reagan was paid at a much
higher rate. In February, Reagan and Smith, together
with Andre, agreed to withdraw their demand for union
representation in exchange for pay raises. In Smith's
case, the employees' decision reflected not only a quid
pro quo, but also a change of heart. Smith testified that
he felt he made a mistake in joining the Union, that he
had "bad feeling" toward the union, and that he told the
Marchidos and Westover about his changed attitude. In
contrast, Reagan, who initiated the union campaign, was
unrepentant. In February, shortly after Dan Marchido
threatened to blackball the employees, he asked Reagan
what brought about the union campaign. Reagan went
into detail about his grievances, which only partially in-
volved his rate of pay. Reagan's termination had the pre-
dictable effect of impairing the efficiency of the service
operation. Notwithstanding the layoffs, the service de-
partment sustained a loss of $1,943 in March, the largest
monthly loss since Dan and Dave Marchido took over
the business. Frank Smith worked substantial overtime
hours in March and early April, and Carol De Rochey
(after her return) helped in the parts department. James
McGowan, a former company employee, was brought in
on some evenings to do mechanical work. The Company
hired one mechanic who did not work out, and left after
a week. In May, the Company hired Calvin Smith
(Frank Smith's brother) as a full-time employee "to do
mechanic's work" (Dan Marchido's affidavit). Calvin
Smith did cleanup work (essentially a part-time func-
tion), but he also performed grease jobs, oil changes,
minor tuneups, brake jobs, and other minor mechanical
work. Calvin Smith was still working for the Company
as a mechanic at the time of this hearing. In the mean-
time Frank Smith replaced Reagan as the Company's
"A" mechanic, and he remained at least until late De-
cember 1978. (As of the time of this hearing, Frank
Smith and Jim Westover were working for Mona Shores
Toyota.) In sum, the Company was well aware that so
long as it held the Toyota franchise it could not operate
with Frank Smith as its only mechanic. It is evident that
the Company terminated Reagan in order to get rid of
4#2
GENE'S TOY()TA SALES AND SERVICES, INC.
the last union adherent, and not for reasons of economy
or efficiency.
The alleged "bad mouthing" by Reagan was demon-
strably a pretext. As indicated, Dan Marchido admitted
in his affidavit that this matter had nothing to do with
the Company's decision to terminate Reagan, and he told
Reagan that he was being laid off for lack of work. Ac-
cording to Dave Marchido, Frank Smith reported to Jim
Westover that Reagan had been bad mouthing the busi-
ness to customers, and specifically to one Harold Clem-
ens. Dave Marchido testified that the Marchidos asked
both Clemens and Reagan about the matter, that Clem-
ens said that Reagan was "bad mouthing the manage-
ment, and that Reagan admitted bad mouthing the place
to Clemens. However no evidence was presented as to
the content of the alleged badmouthing. Clemens was
not presented as a witness, and Reagan was not ques-
tioned about the matter. Testimony about the matter was
hearsay, except for the alleged admission by Reagan to
the Marchidos. It is possible that Reagan was expressing
the grievances which led him to join the Union, or talk-
ing about the Company's unfair labor practices. In these
circumstances, including the fact that the entire matter
was used as an additional pretext to terminate Reagan, I
find that Reagan was not subsequently recalled to work
for the same reason that he was terminated, namely his
union activity, and that Reagan did not engage in any
misconduct which would warrant denial of the conven-
tional remedies of backpay and reinstatement. American
Medical Insurance Company, 224 NLRB 1321, 1329-30
(1976), 235 NLRB 1417, 1418 (1978). 1 find that the
Company terminated Reagan because of his union activi-
ty, and thereby violated Section 8(a)(1) and (3) of the
Act.
CONCt USIONS OF Law
1. The Company is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. By interfering with, restraining, and coercing its em-
ployees in the exercise of the rights guaranteed them in
Section 7 of the Act, the Company has engaged, and is
engaging, in unfair labor practices within the meaning of
Section 8(a)(1) of the Act.
4. By discriminating in regard to the tenure of employ-
ment of Walter Reagan, thereby discouraging member-
ship in the Union, the Company has engaged, and is en-
gaging, in unfair labor practices within the meaning of
Section 8(a)(3) of the Act.
5. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
THE REMEDY
Having found that the Company has committed viola-
tions of Section 8(a)(1) and (3) of the Act, I shall recom-
mend that it be required to cease and desist therefrom
and take certain affirmative action designed to effectuate
the policies of the Act.
1laving found that the Company discriminatorily ter-
minated Walter Reagan, it will be recommended that the
Company be ordered to offer him immediate and full re-
instatement to his former job or, if it no longer exists, to
a substantially equivalent position, without prejudice to
his seniority or other rights and privileges, and make him
whole for any loss of earnings that he may have suffered
from the time of his discharge to the date of the Compa-
ny's offer of reinstatement. The backpay for said employ-
ee shall be computed in accordance with the formula ap-
proved in F. W. Woolworth Company, 90 NLRB 289
(1950), with interest computed in the manner and amount
prescribed in Florida Steel Corporation, 231 NLRB 651
(1977). 4 It will also be recommended that the Company
be required to preserve and make available to the Board,
or its agents, on request, payroll and other records to fa-
cilitate the computation of backpay due.
Certain aspects of the backpay and reinstatement
remedy warrant elaboration, as they are closely related
to the merits of the case and involve changes which
were the subject of testimony or litigation in this hear-
ing. It is settled Board policy that employees should not
be deprived of the benefit of pay raises which were
granted by the employer in order to discourage union ac-
tivity. To do otherwise would be to penalize the employ-
ees for the employer's unfair labor practices. Moreover,
Dan Marchido testified that he intended to carry out his
promises regarding the pay raises, and Frank Smith con-
tinued to receive the higher rate of pay for the duration
of his employment with the Company. Therefore the
finding is warranted that but for his discriminatory termi-
nation, Walter Reagan would have continued to receive
the rate of 9 per hour. and his gross backpay should be
computed accordingly for the duration of Frank Smith's
employment. As Smith functioned as Reagan's replace-
ment, gross backpay should be computed on the basis of
the number f hours worked by Frank Smith. The
record indicates that after the Company sold its Toyota
dealership, the Company continued to perform mechani-
cal work, and continued to use at least one employee
(Calvin Smith) for this purpose. Therefore continuing
computation of backpay and a conventional reinstate-
ment order are warranted. However, in view of the
changed nature of the Company's operations since De-
cember 1979, the determination of a formula for compu-
tation of backpay after Frank Smith left the Company
should be left to the compliance stage of this proceeding.
The remedy is without prejudice to the right of the Gen-
eral Counsel to assert that any person, firm, or corpora-
tion is the Company's successor or assign and liable ac-
cordingly.
Upon the foregoing findings of fact and conclusions of
law, and upon the entire record, arid pursuant to Section
10(c) of the Act, I hereby issue the following recom-
mended:
I See, generally. lwiv Plumbing & theating Co. 138 NLRB 71h, 717 721
(1962)
483
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER5
The Respondent, Gene's Toyota Sales and Service,
Inc., Muskegon, Michigan, its officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Discouraging membership in Local 527, Interna-
tional Brotherhood of Teamsters, Chauffeurs, Warehou-
semen and Helpers of America, or any other labor orga-
nization, by discriminatorily terminating employees, or in
any other manner discriminating against them with
regard to their hire or tenure of employment or any term
or condition of employment.
(b) Threatening employees with unfavorable employ-
ment references in retaliation for their union activities.
(c) Discriminatorily prohibiting or restricting employ-
ees from using its telephones for personal calls, in repris-
al for their union activities.
(d) Promising or granting wage increases to its em-
ployees in exchange for their withdrawal of support for
said union or any other labor organization.
(e) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of their
rights to organize, to form, join, or assist labor organiza-
tions, including the above-named labor organization, to
bargain collectively through representatives of their own
choosing, to engage in concerted activities for the pur-
' In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the find-
ings, conclusions, and recommended Order herein shall, as provided in
Sec. 102 48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
pose of collective bargaining or other mutual aid or pro-
tection, or to refrain from any and all such activities.
2. Take the following affirmative action which is
found necessary to effectuate the policies of the Act:
(a) Offer Walter Reagan immediate and full reinstate-
ment to his former job or, if such job no longer exists, to
a substantially equivalent position, without prejudice to
his seniority or other rights, and make him whole for
losses he suffered by reason of the discrimination against
him as set forth in the section of this Decision entitled
"The Remedy."
(b) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other re-
cords necessary to analyze the amount of backpay due.
(c) Post at its Muskegon, Michigan, place of business,
copies of the attached notice marked "Appendix." 6
Copies of said notice on forms provided by the Regional
Director for Region 7, after being duly signed by Re-
spondent's authorized representative, shall be posted by
Respondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by Respondent to insure that said notices are
not altered, defaced, or covered by any other material.
(d) Notify the Regional Director for Region 7, in writ-
ing, within 20 days from the date this Order, what steps
Respondent has taken to comply herewith.
6 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
484